Renewable energy stocks

When Vineyard Wind completed the installation of the first GE Vernova Haliade-X 13-megawatt wind turbine in the waters southwest of Nantucket in October 2023, the company trumpeted it as “the largest turbine in the western world.” It was supposed to be one of the 62 turbines that would make up the first large-scale, commercial offshore wind farm in the United States.

But just nine months later, the project has been suspended by the federal government after the now infamous turbine blade failure on July 13th that left Nantucket’s beaches and the waters surrounding the island littered with fiberglass and styrofoam debris that is still being recovered…

And these jumbo-sized turbines have only recently been installed in just two locations in the world within the last year - at Vineyard Wind off Nantucket, and the Dogger Bank Wind Farm off the northeast coast of England. The Haliade-X turbine blades - which are supposed to have at least a 25-year lifespan - have suffered failures in both locations…

Strazik also disclosed that GE Vernova will reinspect all 150 blades manufactured at the LM Wind plant in Canada…Strazik’s disclosure on the investor call about the LM Wind Power plant in Canada means that both of the company’s factories capable of manufacturing blades for the Haliade-X wind turbines have run into trouble.

DB2

2 Likes

That was in November. This week we learn that

Stumbles for Embattled Solar Firm SunPower End in Bankruptcy
https://www.bloomberg.com/news/articles/2024-08-06/former-manufacturing-giant-sunpower-files-for-bankruptcy?utm_source=website&utm_medium=share&utm_campaign=twitter?sref=5dj0X2VO
After a drawn-out saga involving a restructuring and a management shakeup, one of the the most prominent names in US solar, SunPower, has now filed for bankruptcy.

DB2

3 Likes

A press release issued at 7 a.m. Tuesday morning said the Bureau of Safety and Environmental Enforcement had given the developers of the wind farm permission to resume the installation of towers and nacelles (which sit atop the tower and convert wind energy into electricity), but a suspension remains in effect for turbine blades and power generation.

Industry statistics paint a grim picture: the failure rate for smaller blades is 0.54% per year (roughly 3,800 blades fail annually). The failure rate for these new gigantic blades is much larger due to the significantly higher mechanical loads and fatigue stresses, especially near the blade tips and leading edges.

There will be 1,000 turbines off Rhode Island…With three blades apiece, even at the lower failure rate we can expect about 16 massive blade failures annually.

DB2

Of course we Americans also seem incapable of building bullet trains, profitable BEVs (Tesla excluded), and designing cities for efficient rapid transit. It doesn’t mean these things can’t be done.

China’s offshore wind boom drives costs down to match coal…https://www.rechargenews.com/wind/chinas-offshore-wind-boom-drives-costs-down-to-match-coal/2-1-1465110

There was a time when we used to do engineering stuff like this:

Even in the US with its offshore issues, wind power seems to be doing okay relative to coal.

Or perhaps we are just more of a solar nation, even in a red state…

4 Likes

Renewable stocks were down bigly today. TAN down 11%, ICLN down 7%, FAN down 6%.

DB2

1 Like

Ayup. TFG is all in on coal and oil. Oil got a special mention in his speech last night. He said that, while Kennedy, will be given his head regarding health care, TFG will handle the oil industry personally. There was a rumor, a few months ago, that TFG had a meeting with oil industry execs, and said that, for $1B, he would give the industry honchos everything they want.

Oddly, my electric utilities were a mixed bag today. Sempra up 7.3%, but Next Era Energy down 5.25%, AEP down 4.13%, Duke Power down 0.39%

Consumer non-durables got hit too. P&G down 2.84% and Kimberly-Clark down 2.37%.

But my education privatization play, LRN was up 4.95%. Big oil COP up 4%, CVX up 2.81%.

Steve

1 Like

Rising gas prices are part of inflation that is very visible to consumers. War in the mideast does not help.

Remember Keystone pipeline. Will it pump again.

Drill baby drill for more supply.

Slow EV adoption. Soften requirements for better ICEs to help auto industry jobs.

Negotiate peace in the mideast must be on the list.

What else?

1 Like

In a word: NO.

Keystone XL was a “least cost/quickest completion” project for Canada. There was zero benefit for the US because all the oil was intended to be sold to Asia, Europe, and so on. When the pipeline was killed by the US, TransCanada then took the time to work out a deal with the various Native Tribes in Canada to build a pipeline to the coast–where it could be loaded onto ships and sold to Asia, Europe, etc. Now, prices for oil in the breadbasket of the US have gone UP because the refineries no longer get discounted oil from Canada. They have to pay full market price. How much more do farmers, etc in that area have to pay? An additional $5+B per year, as stated in the economic statement provided by TransCanada to the Canadian govt before the Canadian govt approved their portion of the original Keystone XL pipeline. Some idiots never learn.

No, Keystone pipeline brought oil to midwestern refineries. Nothing to do with Asian markets. Marathon refinery in eastern Illinois and Shell in Wood River, IL at least.

The issue was passage through Indian lands and possible leaks.

1 Like

Nope. Keystone pipeline already existed to those refineries, so the “new and improved” Keystone (not XL) were merely replacements for older lines that needed to be replaced/updated. I know because one of them went through northern MN–and it was all in the news.

Keystone XL was to bring “trapped” central Canadian oil to the Gulf of Mexico, where it could be exported by Canada to Asia, Europe, etc. Once Canada had a pipeline to ANY ocean port (the defining purpose of the XL pipeline), Keystone XL became irrelevant because it was no longer needed.

1 Like

With the incoming administration’s clearly stated agenda to promote the production and consumption of oil, I may reopen positions in one or two pipeline MLPs, that I had several years ago. Had them in the IRA, to avoid the arduous bookkeeping of having them in the cash account, but there is a $1000/year income limit in an IRA, before the arduous paperwork comes around to bite you again.

Steve

1 Like

At least 14 turbine blades built for the Vineyard Wind project have been shipped to France from New Bedford, apparently due to a manufacturing defect that has resulted in layoffs and suspensions at the blade manufacturing plant in Gaspé, Quebec.

GE Vernova laid off nine managers and suspended 11 unionized floor workers at the LM Wind factory in Gaspé last month in response to the defective blade that broke on a turbine in July, the local union confirmed to The Light on Monday. The Gaspé plant had been manufacturing and supplying most of the blades for the Vineyard Wind project until the blade failure.

Managers at the LM Wind plant may have falsified quality testing data, according to a report from local outlet Radio Gaspésie. Citing anonymous sources, the radio station reported in late October that executives at the LM Wind plant may have asked employees to falsify quality control data, favoring production quantity over quality.

DB2

1 Like

Should fraud at one company be a reason to pick or not pick a particular energy source vs another?
Certainly it should be considered when picking a particular company.
Did any company ever do something wrong related to other energy sources, such as improper handling of offshore oil, resulting in spills; or navigating while drunk of an oil tanker?

Mike

1 Like

I suppose it depends upon the effects on the industry and how it is viewed by the public. Apparently the losses to GE Vernova are approaching $1 billion. We know a number of offshore wind projects have been cancelled. We know the residents of Nantucket are unhappy, and from nearby Cape Cod we read that…

DB2

Back in May we learned that Shell was cutting jobs in its offshore wind unit. From this week…

Shell slows offshore spending
https://www.reuters.com/business/energy/shell-slows-investments-offshore-wind-splits-power-business-2024-12-04/
Shell is stepping back from new offshore wind investments and is splitting its power division following an extensive review of the business that was once seen as a key driver of the company’s energy transition strategy.

The changes are part of a company-wide review launched in 2023 aimed at reducing costs as CEO Wael Sawan focuses on activities with the highest returns. In many cases that has meant reducing spending on low-carbon and renewable businesses and increasing the focus on oil, gas and biofuels.

“While we will not lead new offshore wind developments, we remain interested in offtakes where commercial terms are acceptable and are cautiously open to equity positions, if there is a compelling investment case,” a company spokesperson said in a statement.

DB2

1 Like

Exactly! If there is a reasonable potential of profit, they will do it. If there is no or low potential of profit, they will not do it. That’s how all business works.

2 Likes

Companies that make wind turbines have been reporting losses–especially for offshore turbines. Apparently the contracts have long lead times, wind turbines are remarkably sensitive to inflation, and cost escalators in contracts proved to be inadequate. Suppliers responded by writing in better inflation adjustments but that made final cost of a project uncertain.

For now timing is bad, but we hope slowing inflation will make wind turbines a good business again. But not now.

1 Like

Which proved to be a good move, Captain. Since then ENPH has gone from $150 down to $64.

In review, during 2024 wind did better than solar. FAN was down only 5% (S&P up 25%) while TAN sunk 31%.

DB2

1 Like

Last week, the federal government lifted the suspension on Vineyard Wind’s installation of the remaining GE Vernova wind turbines…

The RCA found that there was insufficient bonding at certain locations within the blade, which should have been detected at the manufacturing plant through inspection and quality control procedures. After reprocessing of the manufacturing data from the installed blades, additional blades with insufficient bonding were identified.

BSEE directed Vineyard Wind to remove all blades manufactured at GE Vernova’s facility in Gaspé, Canada. The COP addendum includes removal activities at 22 locations

DB2

1 Like

One wishes the same amount of scrutiny would be used on petroleum pipelines.

Enbridge started investigating and found the problem was a bad connection on a pump transfer pipe. It was likely leaking for an “extended period of time,” according to the report. https://www.tmj4.com/news/waukesha-county/almost-70-000-gallons-of-crude-oil-spilled-by-an-enbridge-pipeline-in-jefferson-county

And the Keystone pipeline has been a bit of a disaster.

All energy has its issues, but a failing wind turbine rarely spills thousands of gallons of toxic waste into the surrounding neighborhood.

1 Like